How to Have a Great Christmas On a Budget

Many of us are tightening our purse strings this year, out of necessity rather than choice. The American Research group has reported that “Shoppers around the country say they are planning to spend an average of $431 for gifts this holiday season, down from $859 last year.” If you’re trying to get out of debt or start the saving habit, don’t wait until January: you can have a great Christmas on a budget, without scrimping on enjoyment.

Even if you have kids, there are plenty of ways to reduce the amount that you spend on presents and on all the other trappings of Christmas. Here are a few ideas:

Gifts
Are there some relatives and friends who you barely know, yet feel obliged to exchange gifts with? Why not declare a “gift amnesty” this year, and just swap goodwill instead? If that takes too much of the cheer away, suggest a spending limit and challenge people to get creative within that!

Amongst a large group of friends or colleagues, “Secret Santa” can work well. One volunteer takes everyone’s names, randomly tells each person someone to buy a gift for, and then the group meets to exchange gifts, which should be wrapped and labeled with just the recipient’s name.

Everyone should get one present – but no-one (except the organiser and the giver) knows who gave it to them. Set a spending limit ($5 or $10) and have fun guessing who gave what!

It can be tricky to set spending limits when you have children who clamour for the latest expensive electronic toy. With older kids, you could just say that there’s a spending limit, and if they want something more expensive, it will need to be a joint gift from several relatives. (If they have a birthday near Christmas time, you could suggest making it a joint birthday-and-Christmas present.) For younger kids, try suggesting cheaper games and toys that they might enjoy, and encourage them to write these on their Christmas list.

Being organized well ahead of time will help cut the cost of gifts: check different online stores for the cheapest deal, rather than dashing around the high street in the manic days just before Christmas (although we’re getting close!).

Decorations
Although gifts might be the most expensive part of Christmas, decorations can also take a big toll. Figure out what’s non-negotiable (perhaps a tree) and cut back on everything else. Many decorations can be made for pennies by getting crafty – this is also a fantastic way to get your kids to focus on something other than just receiving presents.

Some easy paper decorations to make include:

  • Paper lanterns (you can find instructions here)
  • Paper chains – cut strips of paper, make into interlocking loops
  • Snowflakes and paper doilies
  • Strings of paper dolls, holding hands

You can also pick up decorations for free – just by going for a walk. How about pine cones and twigs for a beautiful table centerpiece, or to put in a bowl by the fireplace? You can spraypaint them silver or gold to add a Christmassy feel.

Food and Alcohol
It’s easy to get carried away when grocery shopping over Christmas, especially if you’ll be regularly playing host to groups of people. Don’t feel obliged to fork out for expensive party delicacies like prawns, olives, smoked salmon and fancy ready-made canapés.

Base meals around cheap staples like rice, pasta and veggies; try some crowd-pleasing choices rather than fancier options: fajitas, lasagna and curries are all great options. (Though you’re unlikely to get away with this on Christmas day itself!) Alternatively, arrange a pot luck and ask guests to all bring a dish – or plan a three course meal but get someone else to bring the starter and dessert.

When it comes to alcohol, don’t pay for bottles of fancy wine that won’t be appreciated, and don’t worry about matching wines to different courses. Just get some middle-of-the-range red and white wines, and your guests will be perfectly happy. Mulled wine or punch can work out very cost-effective, too, as a cheap bottle of red wine will work perfectly in this.

Alternatively, ask your guests to “bring a bottle” to the dinner or party that you’re hosting (many may show up with one anyway) – this is an easy way to ensure that everyone has something which they like to drink.

Entertainment
When the kids are off school over Christmas, or when you have hordes of relatives and guests to take care of, you can end up spending a fortune on movies, meals out, theme parks… Try to have a few days of cheap (ideally free!) entertainment instead.

These are just a few activities that kids and adults can enjoy together:

  • Home movie night – rent a couple of DVDs (or borrow from a friend), make popcorn, and snuggle up under duvets. Much cheaper than cinema tickets, and you can even pause the movie midway to get more snacks…
  • Putting on a play or puppet show for parents/relatives – a giant cardboard box can be a great “stage” for puppets, and costumes can be improvised by borrowing other people’s clothing (with permission…)
  • Board games – dig out some old family favourites, and have a games evening with your kids. Let them introduce some “house rules” to keep everyone on their toes.
  • Outdoors adventure – wrap up warm and go “exploring”. Drive off into the countryside, or visit part of your home town that you’ve never been to before.

How are you keeping the cost of Christmas down? Have you got any great money-saving tips?

Written on 12/05/2008 by Ali Hale. Ali runs Alpha Student, a blog packed with academic, financial and practical tips to help students get the most out of their time at university. Photo Credit: Randy Son Of Robert

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